Does the seller have to lower his asking price?

Question

We are In the process of buying a house, we had the property we are wanting to buy surveyed (home buyers pack) and the bank (barclays) value the property £13,000 less than the asking price we initially agreed.

I think it is fair to say that the bank think the house is over priced, hence the lower value and amount they will lend to us.

So, the ball is in the sellers court, does he have to lower his asking price to match what the surveyor said?

I guess he doesnt and could put the property back on the market but that means he starts from scratch.

Are the banks being cautious considering the current market conditions?

The overall question is:

I take the surveyors report to be credible and valid, this is my bargining chip, does the vendor have to agree that the house is worth what the bank will lend us?

All answers gratefully recieved.

But.....how objective are valuations? A different surveyor could give a very different valuation. The surveyor who valued the property was not local. l know banks are being over cautious at present what with the credit slump etc.

The reality is that the seller needs the full asking price as he is already committed on another property. having spoke to the sellers estate agent he will in NO WAY drop the full 13,000.

I blame estate agents for talking up the market ;o(

Answer 1

The seller doesn't have to lower his price but it looks like there won't be a deal unless he does.
At the moment surveyors are being cautious with valuations as the banks are scared of being caught out with over-valued properties because of the goings on in America earlier this year.
The survey is a great bargaining chip to use to get the price reduced but there's nothing to stop the vendor holding out for the full amount, especially if they have had lots of viewings, etc.
You now know how much the bank will lend on the property so if you really want it you may have to put more of your own money into the pot to buy it.

Answer 2

The seller doesnt have to agree with the valuation report carried out by the surveyor, he could put the house back up on the market but it is unlikely to sell if it is overpriced, never pay more for a property than what it has been valued at. My advice would be to tell the vendor that you are only willing to pay how much the house is worth and if he doesnt agree to lowering the price then start looking for another house.

Answer 3

The vendor doesn't have to agree with your surveyors report and they too can be wrong about their valuations, for example:

I had my house valued but I wasn't really that impressed by what I was advised - so I did my own research into the area and looking at various properties as well as those similar to my own that valuation (that I received) was way off the mark.

I decided to test the water and I did have people interested in my property at the vaule I listed it at - 20,000 more than was advised - I was even made an offer though, obviously any offer tends to be below the original asking price.

I think it shows, do your own rsearch since you are living in that area and not the surveyors or the banks - the information they go on can very well easily be out of date or they are just simply not thorough enough when it comes to visiting the area.

Answer 4

No, he doesn't *have* to lower his offer. As others have said, another surveyor could find the property worth more than that. Also, if he is in a chain, he might not be in a financial position to lower the price. £13000 is an awful lot of money to drop your price by and it effectively would place the house he is buying at that much more expensive. If he can't afford to foot that bill he might have no choice but to pull out of proceedings altogether.

In my opinion, I would talk to you estate agent and let them handle this. They will put your finding to the buyer and find out if he is prepared to come down on the price a bit. I wouldn't for one second expect him to drop by the full amount though.

Good luck!

Answer 5

The vendor doesn't have to lower the price but if they have accepted your offer, the chances are they have put an offer in on their next property so it would be awkward for them to have to start from scratch again and would therefore either meet you halfway or accept your lower offer..... particularly if the valuation by the bank is now on the survey results.
I think you have good grounds but the vendor doesn't have to accept your lower offer.
Oh, the only catch to this would be if you had exchanged contracts already - if you have done there's nothing you can do.

Answer 6

The surveyor, is thier to advise the mortgage lender on what he believes, is the price that this propery could sell for, with no problem.

The surveyor is appointed by the lendor. They tend to undervalue properties by around 5% to 10%.

If the asking price is inexcess of 10%, You should then raise concern with the vendor. Maybe asking the vendor to bring the price down by a percent or two.

Kind regards.

Answer 7

The seller can:

stick to his guns or reduce the price its up to him

You can drop out or put down a bigger deposit...as no bank will lend more than a asset is worth...but you need to bear in mind that come Spring we will see property prices fall including this one..its not transparent now as it always quiet at this time of year few pple move, sell etc

We are in for the readjustment and property prices will fall including this property you are buying...you will get it for less in a few months...do you want to take the risk and buy it now?The banks are cautious but do not lie to yourself and think that market conditions will change soon they will not....PRICES will fall...loads of pple are saying they won't bcoz things are different to the 90s...fools...

Property prices are not based on the demand and supply of houses..they are based on the demand and supply of credit....not bricks & mortar that drives property values..if credit is plentiful and cheap property values rise more pple chasing houses with more borrowed money created higher prices...once credit becomes scarce and pricey like it is now and will continue to be...means fewer pple and less money chasing property..ITS AS SIMPLE AS THAT....The housing market is suffering bcoz credit has become more expensive....check mortgages now they all have arrangement fees...think long and hard b4 you proceed....

Answer 8

This seller could decide to put his/her house back on the market for the same price that you agreed to but he is likely to end up in the same position with the next buyer. If he decides to wait for a cash buyer, he would be wise to realize that people with cash are buying at bargain basement prices. Not overpriced homes. If the seller will not accept and adjust to the appraisal price then he should plan to keep this house for another few years.

Answer 9

The seller does not have to reduce their price,and £13,000 is a huge reduction,which they might think is odd.Did they have an estate agent?did they give this valuation? They will be sensible to reduce a bit,all prices are coming down.I am looking for a house too,and the agents are giving me brochures on properties a lot more that what they know I have.

Answer 10

The property seller does not have to agree to lower the asking price for the property. It's not his fault that the bank thinks it is worth less than he thinks it is. However, depending on how badly (or not) he wants to sell, practicality dictates that he would lower the price in order to sell, since he would limit himself to buyers who are willing to pay cash over and above the appraisal in order to purchase.

But, he has no obligation to follow such practicality.